Same Field or Same Game…

Amar Pandit , CFA , CFP

Imagine a football field in your neighbourhood and you see people playing cricket one day. You might or might not be surprised seeing people play cricket on a football field. I am personally not surprised because you can even play cricket in a football field (I am not talking about a stadium here). 

I assure you there is a connection and I have an interesting point to make.

Just because the field is one does not mean different games cannot be played on it.

Cricket is a completely different game with its different set of rules. Even a 5-day Cricket Test match is a different game than a T20 match. The rules are radically different even for the same game of cricket. However, every format of the game can be played on this field.

Similarly, the stock market is like a giant field.

There are different games being played by different people. They have different objectives, rules, and values. 

These are a few ones played in the stock market:

  • The Gambling One or the Tip One. You hear something and you want to buy or sell.
  • The Professional Trader One – This person does trades for a living and it is the full-time job.
  • The Reactive One – This person actually invests, is market focused and event driven. He thinks he is investing but generally displays qualities of a trader and has very little tolerance for riding the rollercoaster. 
  • The Long-Term Investor – Is Goal Focused and Planning Driven and follows a disciplined process of investing.

Each one is playing a different game with different rules. Do not confuse a gamble gone right as a great decision. Just because a reactive one has got something right once does not mean this is insight or foresight or research. Most mistakes and blunders happen when people do not understand the game, they are in.

You need to decide the game you are playing.

Which game are you playing or want to play?

Like always the choice is yours.